Quinn and Koepsell Discuss Gene Patents on GritTV

Last Monday, October 26, 2009, I had the opportunity to discuss gene patents on GritTV with host Laura Flanders. I appeared on the show via Skype video along with David Koepsell, the author of Who Owns You? , who was in the studio. I was supposed to be in New York City with David to debate him at Cardozo Law School, and then over tot he GritTV studios, but I was unfortunately under the weather and unable to make the trip. Thankfully the producers were able to connect us via Skype, and I was able to down some DayQuil and manage to get through the 12 minute segment, which appears below. I think this segment came out quite well, and Flanders did an excellent job. Before the tape started rolling she told us both that after reading the material we both submitted she didn’t know what she believed, because both sides raise good points. I think you will see she did a very even handed job, and I hope she picks up with this more in the future. It was clear she did her homework and facilitated a fair exchange, which is all you can ask for in such a format.

After our appearance I have been exchanging e-mails with David, who I do respect even if we have quite different viewpoints on the matter. In such a short setting like there there are undoubtedly points that you wish you mentioned, or made better, so I asked him if he would give me a couple paragraphs on what, in retrospect, he could have or should have said during our interview. You can read more about David’s position at Doing Philosophy in Public. David also provided me with the following thoughts for publication here:

The only point I would have elaborated was the non-inventiveness of cDNA, which involves a brief scientific explanation: mRNA does the exact same thing in our bodies, and has done so since evolution began. I hope you will link to my latest blog post, which says everything else, beyond an academic discussion, and makes the point about this issue that I would really like you to see: more people are hurt by gene patents than helped, the corporations want this to be a legal/academic debate, but there’s something even more important: helping people. My solution isn’t communist, and I am not Hugo Chavez (as you alluded once to those of us on this side of the issue). In fact, I’m radically free-market. I hate government sponsored monopolies. You have admitted there is no natural right to IP, and our choices about what is covered are thus entirely up to us. Genes are being patented, they are not sufficiently man-made to warrant it, and people are being hurt.

Search your heart, I think you realize it’s time for something to give on this issue. It won’t collapse the economy, it won’t even slow down research, it will help. Even in our debate, you stated that something has to change. This is something that we can change, and improve people’s lives, and cut through the greed. Myriad doesn’t need the additional $3 billion it will make, marking up the costs of this test to $3800. It costs a lab only about $400 to do this test without a patent. We need to re-examine our priorities.

I too wish I had an opportunity to raise some additional things, and in retrospect I wish I time to say a little more.

[Bio-Pharma]

The goal of the patent system is to encourage innovation, which from a policy standpoint we have always viewed as something extremely positive for society and the public at large. The cost of innovation, particularly in those areas where we desire innovation the most, is quite high and only growing. Critics of the patent system frequently are critical of granting exclusive protections to incremental advances, and say that they want large leaps and patents to protect those inventions that demonstrate a significant advance, perhaps even paradigm shifting inventions. These types of innovations are radical, industry changing or even industry making. They also require exorbitant amounts of money, and often the research and development is exceptionally speculative.

The way to foster the type of innovations that we want and that society benefits from is by having strong patent protections that give to innovators exclusive rights for a limited period of time. Without strong exclusive rights we would not obtain nearly the level of private funding of research and development. This is evidenced by what we see around the globe in history, as well as today. Those countries that have the strongest patent protections are where industry leading corporations locate. Countries that have little, no or weak patent rights are not welcoming to industry. This means that little money is invested, few jobs (or no jobs) are created and the economy suffers.

While increasingly anti-patent critics say that with patent rights no generics will be made and the public will never reap the rewards. That is simply not true. When an invention goes off patent it is free to be used by anyone without payment. The trouble is that the anti-patent crowd seems to want no patents period, and when the patented inventions they complain about today are off patent they no longer have interest, and are on to arguing about whatever the newest patented innovation is. This has always been the case, and is evidenced by the anti-patent AIDS community. Rather than focus on the thousands of off-patent drugs that could save hundreds of thousands or millions of people each year for virtually no money, they focus on the patented drugs. The goal is not to help people, it is to help people with AIDS, or to simply attempt to break patents.

In this interview we discussed the ACLU case against Myriad Genetics. This is a horrible case for the anti-patent community to rally behind because those who are complaining about the patents in question are complaining because they want to know whether they have a predisposition for certain cancer. The test will not help them treat the cancer, it won’t even tell them if they have the cancer, it will just tell them whether they are more likely to develop cancer. They also complain that they would not be able to obtain a second opinion, but that is a lie. They can get a second opinion interpreting the test results, they just cannot force Myriad to allow others to conduct a second test. This is hardly a life-saving situation, but the fate of an entire industry and the advances it could bring in the future hang in the balance.

For what it is worth, I personally like David Koepsell, and I think he is an honorable man with strong beliefs. I think he is misguided, but his passion is real. I feel he wants to do the right thing, and he is hardly anti-innovation. I just think the path he would pursue would lead to less innovation.

In the past, in one blog post I suggested that the anti-patent crowd were no different than Hugo Chavez. That was a low blow, and I apologize for it. I think many in the anti-patent crowd are socialists, and on many levels are politically and ideologically aligned with Chavez, but he is such a divisive character that statement really was not helpful in forwarding the debate, particularly to the extent it was directed David Koepsell. David says he is pro-free-market, and I believe him.

Unfortunately, we do not have a free market. There is tremendous governmental regulations that apply to all kinds of innovation and prevent inventions from reaching the marketplace. While I am completely against anything that would weaken the patent system or patent rights, to the extent that we ever do have any serious political discussions regarding dismantling or weakening the patent system then we need to also have a full, fair and frank discussion about dismantling the regulation of business. So often the anti-patent crowd generally (not Koepsell) laughs at those who believe in patents and want a free market. Of course they do this while saying they are pro-free-market and anti-patent, but without any desire to deregulate business. You just can’t have your cake and eat it too though. If we are going to regulate business we don’t have a free market, and if we want a desirable level of innovation we need to rectify the existence of onerous regulations by providing the required incentive to invest large sums of money on speculative endeavors.

Now let the comments begin. Lets try and keep it civil if we can (saying this to remind myself as much as anyone). Many may believe Koepsell is the enemy, and while is position is different from ours he is a nice guy who is willing to engage, so he deserves a lot of respect.

Gene Quinn Gene Quinn is a patent attorney and a leading commentator on patent law and innovation policy. Mr. Quinn has twice been named one of the top 50 most influential people [...see more]

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com.

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18 comments so far.

Sonali Roychdoudhury
November 12, 2009 02:45 pm
I share Rich’s frustration in the failed single entity clinical trial of Myriad’s patented products. Dale makes a very important point when he says that Patents do not require a lack of collaboration. The breast cancer test pricing has indeed brought the whole world together to discuss the ethics and far-reaching implications of gene patenting. For those of you interested in a knowledge based, and economically strong future society and want a history and background of this important debate, you may want to read a paper by Bryn Williams-Jones, whose PhD dissertation excellently covers this topic. Its an easy, quick read. http://www.genethics.ca/personal/HistoryPatent.pdf.

Briefly, the paper shows how an international collaboration on the search for a breast cancer gene lead to Myriad US patent for BRCA1; how the second gene BRCA2 was patented by Myriad mere hours before another lab was going to announce it at a conference. It documents the development of rising international anger. It shows how Myriad grew more diverse even while it recorded losses of over $7million a year. More importantly, it reported that the US and Canada invested $3 billion and $300 million respectively to spur biotech research which presumably resulted over the years in revenue of $47 billion and $2 billion respectively.

Investments by the government will lead to new research and patenting will spur commercialization. However, the participants must understand the various ramifications of an evolving, technologically advanced and aging society. Most therapies of the aged are going to be based on biotechnology. Aging by its very nature is genetically controlled. This debate will touch all our lives. Researchers enjoy collaborations and dislike being billed for using patented technology, resulting in less cutting-edge research on the topic.
Dale B. Halling
November 10, 2009 06:22 pm
Rich, actually you comment that genetic research will continue undoubledly is not a foregone conclusion. But what is more important is whether the same level of research will continue without patents – the answer is clearly no. When the US has weakened its patent laws our innovation has dropped and our economy has stagnanted. For more information see http://hallingblog.com/2009/10/26/foreigners-receive-more-patents-than-u-s/.

Your second argument about Myraid is about business strategy not about patents. Patents do not require a lack of collaboration – in fact they are often vital to making collaboration possible.
Rich Kulesus
November 10, 2009 06:08 pm
“If gene patenting is stopped will genetic research continue? Undoubtedly!”

With respect to Myriad and its patents, the research continues in only their labs, and their recent failure in a phase-3 clinical trial is exemplary of what happens when only one entity can PCR amplify or mass-spec separate a targeted gene: stagnation.
Sonali Roychoudhury
November 10, 2009 05:38 pm
I can identify with both Gene Quinn and David Koepsell in this gene patenting debate. However, having lived in two countries and having experienced the lack of technological advance in one I have to be on Gene Quinn’s side. The value of modern technology lies in it’s very ability to cure the one’s you love. However, you would not trust those new technologies if they were not tested in clinical trials. A clinical trial done correctly could cost almost a billion dollars today and more for a drug in an NID today (New Initial Drug application with the FDA). Any biotech can tell you that it is impossible to raise funds for a clinical trial without a good patent. Take the future of stem cell research as an example.

If gene patenting is stopped will genetic research continue? Undoubtedly! However, will that research be commercialized at the current risky pace and bring life – saving drugs into society? Coming from a country where lack of patenting can drive non-genetic business, I can easily say that life – saving drugs will not originate at the current pace; it will slow to a trickle.

Monetary rewards for genetic research have made this field the new ‘gold rush’. I have seen Pharmaceutical giants wonder why the well-paid scientists in their laboratories cannot come up with new inventions at the pace of university collaborated biotechs. Their pipelines dried up in the last decade while biotechs in the same period came up with a diagnosis and cure for breast cancer, small molecule therapies, EPO, a cure for Leukemia, and monoclonal antibody therapies and more. All of them originated through good patents and the Pharmaceutical giants are now racing to identify the lucrative ones to license. Without the current system of patents – most of these inventions would languish in respected peer – reviewed journals.

The answer to innovation lies in the environment created by a society and government supportive of the inventor. The average inventor is creative and will do it for the ‘fun of exploring science in all its glory’ and is not concerned about monetary rewards. However, one must also act on this knowledge. That is where the business minded need the support of wonderful, giving and kind people like David Koepsell.

Every one benefits at the end of the patent term. Generics can be sold a little above cost. Sure enough many cannot afford the $3000/- for a breast cancer test today. However, we have several public options other than stopping the patenting process:
1) let’s start a foundation to cover diagnostic costs for those not covered by health care;
2) let’s participate in the current health care debate and see how we can help those in need;
3) let’s set up focus groups to identify good inventions and set up a public foundation to pay a billion dollars for each and every invention which shows promise.

Stem cell researchers have assured many investors that our current society will live well beyond the age of one hundred. Some of us will die before those inventions are marketed. Some may see in their lifetimes the clinical trials of the ‘aging gene family’. However, the rest of us will have a new worry – how do we save for a hundred years of retired living?
Dale B. Halling
November 4, 2009 02:35 pm
Mike the scarcity argument is nonsense. Scarcity is not the basis of property rights and inventions are subject to scarcity. Inventions are subject to scarcity in their creation – it takes, time, talent and resources to create an invention. Inventions are subject to scarcity in their diffusion – that is why we have college professors, marketing people, sale people. lawyers and doctors. The scarcity argument confuses cause with effect. Property rights are a good way allocating scarce resources, but that is result not the justification for property rights. For more information see http://hallingblog.com/2009/06/22/scarcity-%E2%80%93-does-it-prove-intellectual-property-is-unjustified/
Gene Quinn
November 4, 2009 02:26 pm
Mike-

To the extent the Swiss were innovative it was because they obtained patent rights, not in spite of patent rights.

With respect to taking an unfair advantage, everyone from other countries who uses the US patent process to obtain rights they cannot get in their home countries has an unfair advantage compared to US inventors and innovators, and that should stop.

I think the solution here is to simply say that inventors and innovators are not allowed to use the US patent process unless they grant the same scope of exclusive rights as granted in the US. That would quickly demonstrate the need for strong patent protections.

-Gene
Mike Masnick
November 4, 2009 02:24 pm
Dale, I do not know your economics background, but your explanation here is flat out incorrect.

You are incorrect that “in all areas of economics” property rights encourage economic activity. In fact, our newest Nobel prizing winning economist has spent much of her career proving that is incorrect. I am a HUGE believer in property rights, but they only make sense in situations where there is a question of how to best allocate resources. The entire point of a market-based property rights system is to allow for the more efficient allocation of a scarce resource.

But the problem is that once you enter into a world where the resource is not scarce — such as an “idea” — economists will tell you that a property rights system makes no sense at all. That’s because you don’t need efficient allocation when there’s abundance. In fact, all a property rights situation does in that case is increase transaction costs in order to decrease market efficiency.

Finally, I fail to see how a claim that “monopolies are bad” is extraordinary. In fact, the burden is quite clearly on you. Economists make it quite clear that monopolies lead to less efficient outcomes. Yet, you are claiming that this is not true when it comes to patents. That is an extraordinary claim, and you fail to provide a shred of evidence as to why such basic economics does not apply to patents.

We have seen study after study after study that looks at the history of innovation in places without patents or with weaker patents. It has been compared to neighboring countries with stronger patent systems. They have been compared to right after or right before changes in the patent system occur, and they ALL show the same thing: a patent system does not increase the pace of innovation and often decreases it.

There is plenty of evidence to support that position. There is none to support your extraordinary claim that monopoly rights suddenly make sense when they make no sense in any other area of the economy.
Dale B. Halling
November 4, 2009 02:15 pm
Property rights are not an unfair advantage. The Swiss innovated in part because they were able to get all the benefits of a patent system without having the burden of having to operate a patent system. It’s a classic free rider problem – much like the rest of the world taking advantage of US pharmaceutical research, but not paying for it.

The anti-patent crowed has failed to carry its burden of proof. Ae know that in all areas of economics where it has been tested private property rights encourage economic activity. We also know that when the government establishes incentives, it always results in more of the incentivized activity. We also know that countries with the strongest patent laws have the most innovation and the greatest technology diffusion and vice versa those countries with weak or non-existent patent laws have little or no innovation and little technology innovation. Despite this the anti-patent crowd asks us to believe that patents do not follow the normal rules of economics and logic. As Thomas Paine pointed out in his book The Age of Reason, extraordinary claims require extraordinary evidence. The anti-patent crowd has failed to provide extraordinary evidence to support their extraordinary claims.
Mike Masnick
November 4, 2009 02:06 pm
Dale,

Yes, of course they used other country’s patent systems. If that country is giving you an unfair advantage, why not take it? It certainly doesn’t mean they needed their own patent system. And, of course, the fact that they made use of other countries’ patent system so frequently actually proves the point that both David and I are making: the Swiss chemical industry was innovative.

After all, those who keep insisting that they were just “copycats” can’t explain how they innovated enough to take advantage of the patent system elsewhere.
Dale B. Halling
November 4, 2009 11:46 am
Mike,

However, the Swiss chemical industry was happy to take advantage of other countries patent systems. The Swiss were forced to have a patent system, because they used the US patent system but provided no protection for US inventors. Looking at the whole history it is clear that the Swiss were happy to take advantage of the patent system run by others, but did not want to provide the same protection in their own courntry. For more information see The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790-1920.
Mike Masnick
November 4, 2009 03:51 am
To followup on Gene’s snarky claim about Einstein and the Swiss patent system, it would help if Gene were actually more familiar with the “history” that he claims is so important here. The Swiss did, in fact, have a patent system that was put in place in 1888 (after quite a fight), yet it was greatly limited, only covering inventions that could be represented with mechanical models.

Amusingly (and it’s surprising that Gene doesn’t know this, given his claim to be a student of history), it was actually the massive Swiss chemical industry (which later became the pharmaceutical industry) that pushed for this restriction. The Swiss chemical industry was very, very clear that it did not want patent protection, because it was afraid it would cause great harm to its industry.

The Swiss did finally adjust their patent system in 1907 to include chemical structures, but not because the Swiss chemical industries wanted it, but because Germany and the US (two of the Swiss chemical industry’s biggest customers) threatened massive tarriffs on chemical imports if they did not.

Of course, it’s also worth pointing out that in those years, from 1888 to 1907, the Swiss chemical industry was incredibly innovative and able to come up with new processes not found elsewhere, which made its products some of the most demanded in the world.
David Koepsell
November 4, 2009 02:08 am
I had to address the Einstein patent office employment “argument” because laughing about the irony of it was distracting me from grading… Yes, the Swiss slowly developed a more robust patent system, and yes, Einstein idled time there, dreaming up relativity…. but strangely, having discovered vital natural laws, he did not seek patents. That would have been a great model to follow with discoveries about gene: publish, rather than patent. Anyway, I have a fat zip file of reading about the “Swiss” miracle, and other important milestones in innovation without IP, for anyone who emails me with a request.

best,
-d
David Koepsell
November 3, 2009 01:38 pm
I was available for a full blown debate last week and no one showed up. I don’t blame Gene for getting sick, but I made the time then, and haven’t got the time now, the quarter is finishing up here and I have a pile of grading. I am happy to send a zip file of all my sources if you’d like, just email me and I’ll forward it on to you, then you can read to your heart’s content.

best,
David
Gene Quinn
November 3, 2009 12:09 pm
Thank goodness the Swiss did have a Patent Office. That is where Albert Einstein worked and during his time as a patent examiner came up with his theory of relativity.

I would love to see the evidence that only 12% to 15% of all innovation is related to patent protection. I would also love to know how much commercially relevant innovation is related to patent protection, and I would love to know how much funding is invested in innovations without patent protection. Based on market realities that exist today and have existed for a long time funding only flows into innovations that are patented.

I find it so peculiar that frequently those who want massive advances for the betterment of society are the ones who do not want strong patent rights. You simply cannot have both. Without strong patent rights innovation creeps and does not significantly advance. Just look at the third world and developing nations of the world. Lack of property rights, including intellectual property rights, is a recipe for staying third world. Recognition of property rights, including intellectual property rights, is a recipe for becoming a developing nation. Having strong property rights, including intellectual property rights, is the difference between an economically powerful country and a developing nation.

-Gene
Dale B. Halling
November 3, 2009 11:54 am
Are you just against patent existing human genes, when there is no utility attached to that discovery? For instance, patent a test for a newly discovered gene. This narrow complaint about how the patent system operates is a totally different issue than whether patent system should exist.

By the way your comment that patents are not derived from natural law is incorrect. The basis of property rights, is the natural right of ownership in oneself. Rights that derive from ownership of oneself include the right to one’s labor mental and physical. This is the derivation of both real property rights and patent rights. Since these can only be secured in a civil society, in the 18th and 19th century these rights were labeled privileges. For more information see Adam Mossoff’s excellent paper “Who Cares What Thomas Jefferson Thought About Patents: Reevaluating the Patent Privilege” http://www.pff.org/issues-pubs/ip/bulletins/bulletin2.2jeffersonprivilege.pdf. Mr. Mossoff points out;

In early American history, “privilege” was often used as a legal term of art; it was a synonym for what we would now call a “civil right.” Many fundamental civil rights, such as due process rights, voting rights, property rights, and even patent rights, were defined in the early American Republic as “privileges.” Recognizing this historical context is significant, because it explains how and why many early American jurists, politicians, and legal scholars classified the property rights in patents as “privileges.” More importantly, it explains why antebellum courts and Congresses expanded and extended patent rights throughout the early nineteenth century.

Switzerland and Netherlands do not support your thesis that patents do not encourage innovation. Both countries eventually adopted patent system. Switzerland’s level and area’s of innovation increased significantly when it adopted a patent system. For more information, see B. Zorina Khan’s excellent book “The Democratization of Invention: Patents and Copyrights in American Economic Development, 1790-1920.”

Finally, the anti-patent crowed has failed to carry its burden of proof. Ae know that in all areas of economics where it has been tested private property rights encourage economic activity. We also know that when the government establishes incentives, it always results in more of the incentivized activity. We also know that countries with the strongest patent laws have the most innovation and the greatest technology diffusion and vice versa those countries with weak or non-existent patent laws have little or no innovation and little technology innovation. Despite this the anti-patent crowd asks us to believe that patents do not follow the normal rules of economics and logic. As Thomas Paine pointed out in his book The Age of Reason, extraordinary claims require extraordinary evidence. The anti-patent crowd has failed to provide extraordinary evidence to support their extraordinary claims.
Just visiting
November 3, 2009 02:07 am
“I was going to point out that most innovation occurs without patents or any IP protection at all, and that a mere 12-15% of all the innovation that can be measured occurs with patent protection.”

And evidence for this is???? I could name the place, but I want to get spam filtered.

“I was also going to point out that in the 19th and early 20th centuries, two of the most innovative countries on earth (The Netherlands and Switzerland) had no patent systems at all, and so provide counter-examples to your arguments about the role of patents in innovation.”

First, the evidence for these arguments remain to be seen.

Second, whatever relevance these examples had ended a multitude of decades ago.

At the turn of the century, a new watch design (e.g., in Switzerland) may have been impossible to be copied because (i) an analysis of the design by competitors would have been extremey difficult and (ii) the time it would take to disseminate the information could have taken months if not years.

Today, a product that gets advertised for sale on the internet (produced in Switzerland), and depending upon the complexity of the product, in a week’s time, that product could be in production in China.

Interesting quote from Oxford handbook of innovation:
Switzerland finally approved such [patent] laws in a referendum in 1887, mainly because its important watch industry was under pressure from foreign imitations.

The alleged justification for not having patent laws in Switzerland was that reverse-engineering of the products was difficult, and they were protected as trade secrets (see http://www.nytimes.com/2003/09/29/technology/29PATE.html) However, protecting innovation as trade secrets does not encourage disclosure, which ultimately helps everybody quicker. Technology that is hidden from view (e.g., via a trade secret) cannot be readily improved upon by others. Also, the inventive concepts from these innovations cannot be used to cross-polinate othe fields.

The goal of the US patent system is to promote disclosure, with the carrot being limited rights to the invention.

If David is relying upon Switzerland and the Netherlands as shining examples of what the lack of patent law can acheive, his analysis is paper thin. Then again, what do you expect from somebody with a degree in political science/english?

Poly sci/english majors like to think with their gut. Engineers, however, like to base their decisions on hard evidence.

The fact that both Switzerland and the Netherlands ultimately implemented patent systems should say a lot.
David Koepsell
November 3, 2009 01:09 am
Thanks, Gene, I really was glad we could finally meet virtually and engage in a bit of debate on the spot. I look forward to continuing the dialogue, especially now that the Myriad case is moving forward! 🙂

In the debate we were going to have in person, I was going to point out that most innovation occurs without patents or any IP protection at all, and that a mere 12-15% of all the innovation that can be measured occurs with patent protection. I was also going to point out that in the 19th and early 20th centuries, two of the most innovative countries on earth (The Netherlands and Switzerland) had no patent systems at all, and so provide counter-examples to your arguments about the role of patents in innovation. But really, I am only arguing that the patents in this case should occur further downstream, when something truly inventive is created, not for a mere discovery of a gene sequence.

Anyway, I do enjoy this exchange, and moreover, it is really important. I respect you for your civility and convictions. Once again, thanks.

all my best,
David
Rich Kulesus
November 2, 2009 09:00 pm
“The test will not help them treat the cancer, it won’t even tell them if they have the cancer, it will just tell them whether they are more likely to develop cancer.”

Very true.

To generate potential therapeutics the BRCA gene products (proteins) need to be further studied. Unfortunately for molecular biologists, the 2 traditional methods of accomplishing this, through 1) PCR amplification (prior to cloning and mutational analysis) and 2) harvesting/purification via mass-spectrometry are patented by Myriad Genetics. Thus no beneficial studies can be accomplished on the gene because the two principal means of study have been preempted by Myriad. Rather than “playing nicely” with the scientific community that gave birth to Myriad at the University of Utah, they have been very liberal in sending cease and desist letters.

I believe under the greater majority of scenarios patents are completely necessary for the protection of an inventor’s rights. As a scientist, however, I admit feeling that Myriad’s behavior is very anti-progressive and is by-and-large preventing academic researchers from developing potential therapeutics by denying our access to fundamental biological processes.